Honolulu mayor proposes bill to regulate short-term rentals

HONOLULU (AP) — Honolulu Mayor Kirk Caldwell proposed a bill Thursday that would allow homeowners to run bed-and-breakfast establishments in properties where they live, but ban non-owner transient vacation units in residential zones.

Caldwell hopes the bill will address the uptick in short-term rentals brought on by online platforms such as Airbnb, The Honolulu Standard-Examiner reported .

New short-term rentals have been banned on Oahu since 1989.

Caldwell estimates that there about 10,000 short-term rentals on Oahu today, but only 800 are legal.

He hopes the bill will be fair to residents who are bothered by the impact short-term rentals have on their neighborhoods and homeowners who want a way to make extra money.

Transient vacation units are defined as dwellings rented out for less than 30 days while owners are away.

Bed-and-breakfast establishments are single-family homes rented out when owners are present.

The bill seeks to ban transient vacation units from residential zones except through a permit system in apartment, business, resort and mixed-use zones. Only 4,000 transient vacation units would be allowed island-wide, the city said.

Bed-and-breakfast establishments would be permitted in residential zones as well as apartment, resort and mixed-use zones in unlimited numbers as long as they meet the necessary requirements. They will be limited to two guest rooms and four guests.

Operators of both types of short-term rentals will need to present proof of a homeowner exemption in order to apply for permits and permit registration numbers from the city.

Along with taxes, the bill proposes initial registration fees of $1,200 for a transient vacation unit and $800 for a bed-and-breakfast with annual fees of $500 and $200, respectively.

Operators of illegal short-term rentals would be fined $25,000 a day for a first offense, $50,000 for a second offense and $100,000 for a third offense.

“Heavy, draconian type of fines (would) send a clear message to folks that they need to comply with the law,” Caldwell said.

The bill is headed to the Council and city Planning Commission for review.